The Lemonade Problem

Part one: how a venue survives without the bar

The Big Idea ran a piece this week, Rosetta Stone's write-up of the Neck of the Woods hui, on a question that should bother anyone who cares about culture in this country: how does a music venue survive when it can no longer rely on the bar?

Neck of the Woods nearly closed last month. Its community raised more than $150,000 in under 2 weeks to stop that, and rather than reopen straight into a normal weekend, the venue held a hui to work out what a more durable version of itself might look like. The owner, Jonah Merchant, was blunt about what had just happened. Crowdfunding clears a debt. It does nothing about the model that produced the debt. It also, as he pointed out, uses up the goodwill in the room, so the next venue in trouble can't run the same play.

The model

The model is worth understanding, because Neck's version of it is the common one. The venue doesn't book the acts or sell the tickets. It hires the room to promoters, who run their own shows and keep the door. That is a principled arrangement. It keeps the barrier low for the grassroots scene and stops the venue becoming a gatekeeper. It also means the venue makes almost nothing from a sold-out night beyond what people drink, and people are drinking less. Independent Music Venues Aotearoa put the Auckland average at 1.5 to 2 drinks a head. That is a good thing for music, since people are turning up for the show rather than to get wrecked, and a serious problem for a business forced to survive as though it were a pub.

The decline in drinking is not really the core issue, though. The core issue is that a venue's costs rise on precisely the nights it is busiest. Security, staffing, wear on the room and on the soundsystem all scale with the crowd. The two things that also scale with the crowd, ticket revenue and cultural value, accrue to other people. The promoter takes the door. The city takes the vitality. The venue keeps the wear and tear.

Infrastructure, not hospitality

Which is where the framing goes wrong, before any of the fixes get a hearing. The most useful thing said at the hui came from Lucy Macrae: we shouldn't have to be asking for private funding, we should have a government and councils investing in what we do. She's naming a category error. We treat live music venues as hospitality businesses that happen to host culture, when they're closer to cultural infrastructure that happens to sell drinks. A theatre isn't asked to justify itself through bar takings. A public gallery isn't told to run a Givealittle. We decided those are infrastructure and fund them as such, and we simply haven't extended that recognition to the room where the country's musicians learn their craft. The money isn't even absent. The Major Events Fund pours real public investment into spectacles run by offshore touring companies while the venues that train the local talent see almost none of it. That's not a shortage. It's a decision about where to point the funding, made by a system that counts the wrong things. The private side does the same in reverse: the pipeline that once ran from bedroom to small venue to bigger room to theatre now runs from virality straight to the big stage, which leaves the labels harvesting a grassroots training ground they have stopped paying to feed.

Once you see the venue as miscategorised, the fixes people reach for stop looking like a business plan and start looking like a sector trying to patch a problem it has been handed in the wrong shape.

What the hui landed on

Inside the hospitality frame, the candidates are the ones you'd expect. Put up the venue hire, which just loads the cost back onto the promoters and artists already running the fundraisers, and raises ticket prices at the door. Expand the non-alcoholic range, which helps but won't recover the margin, because nobody works through four lemonades the way they'd have gone through four beers. Register as a charity, or form a co-operative with other venues for collective purchasing and a shared membership. Activate the space during the day, which the venue rightly noted is harder than it sounds, since the room is already in use in daylight for load-in, repairs and maintenance, and a dark basement is a tough sell for a daytime workshop.

The most likely near-term move is a membership: a monthly fee for some set of perks, possibly a single membership spread across several venues so the same supporters aren't hit up ten separate times. That last version is the strongest idea in the room, because it's the only one working at the level of the whole ecosystem rather than one venue's survival.

What the numbers say

It's worth knowing what memberships actually raise, because the numbers are sobering. Lazy Thinking, a not-for-profit in Sydney, moved to a $15 monthly membership after losing around $1,000 a week. Cover losses like that on membership alone and you need close to 300 committed members before you are back to zero. Neck needs to lift revenue by $100,000 to $150,000, which at the same rate is somewhere between 500 and 800 members. Membership is real money and worth chasing. It is also nowhere near enough on its own.

The venues that have gone furthest have done it by becoming more than venues. Mo's Desert Clubhouse on the Gold Coast built in podcast studios, rehearsal rooms, recording studios and a livestream channel, and sited itself on an industrial estate rather than an expensive strip. Even so, the feature that profiles it is titled "adapt or die," and the operators in it describe an industry that is barely viable even when you throw everything at it. Everything they add keeps the doors open without making the model comfortable. The clearest structural wins have come from the not-for-profit route. When the Parlor Room in Massachusetts converted and opened a school of music, the change unlocked tax-deductible memberships, grant eligibility, and a teaching arm that fills the building during the day. Club Passim found much the same, and calls its grant eligibility essential. In New Orleans, the band Galactic bought Tipitina's outright in 2018, which is the only version of any of this that permanently solves the rent.

What it made me think about

Watching from the outside, there are a few possibilities I keep turning over. Some the people running venues have surely already weighed, and I offer them less as fixes than for what each one assumes a venue is.

The first is location. CBD leases are a large part of why the maths fails, and the assumption that a scene can't move is weaker than people think. A committed crowd will follow a venue it loves to an industrial site, and an industrial site brings higher ceilings, fewer noise complaints from neighbours (the quiet killer of most urban venues), and the floor area to do more than one thing. The catch is that a scene runs partly on density. Part of why K'Rd holds together is that you can hit three rooms in a night on foot. A venue that decamps alone to Penrose becomes an island, and Auckland's late-night transport barely serves the CBD, let alone the fringe. So relocation works as a bloc, which is the co-operative idea again, or bundled with enough on-site draw to be worth the trip.

The second is what fills the building by day, and here I think the sector undersells itself. A rehearsal or recording room is not the dark-basement workshop nobody wants to run. It's infrastructure that working musicians already pay for elsewhere, and it uses exactly the hours the club sits empty. Put a couple of studios behind the main room, split the lease across them, and the pipeline runs through your own building. The artists who rehearse there are the artists who play there.

The third looks small but it stands for something larger. The bar rethink keeps being framed as damage control, a lower-margin substitute for beer, which treats the sober crowd as diminished drinkers rather than as the audience the venue actually has now. Design for that audience instead of mourning the last one, and the question changes. A hot underground room full of people who came to listen is not a market for consolation lemonade. It is a market for something they actually want. The particular object hardly matters, and I offer mine only as an illustration: shaved ice, a branded snowcone with a nip poured over it if you like, high-margin, cooling, photogenic enough to advertise the room for free, and the non-alcoholic version the same desirable thing minus the shot. The point is the move, not the snowcone. A venue has to invent something for the crowd in front of it, rather than sell a worse version of what the old crowd bought.

Part two: Here Together, an arts commons

The venue made the problem legible. What follows is an attempt at the same structural error in a different medium, one where more of the fix is within reach. I call it Here Together. Earlier versions pinned it to one site, a vacant basement in Auckland's Strand Arcade, and I've come to think that was a mistake. The basement was a good opportunity. It was never the concept. The concept is an arts commons, and it can live anywhere with enough floor and a landlord willing to deal.

Participation, and the skill floor

The word that matters is commons, and what separates a commons from a gallery is participation. A gallery gives you something to look at and, if you can afford it, something to buy. It asks nothing of you, and in return it offers most people no particular reason to return. A commons asks you to do something: make a thing, ask a question that shapes what gets made, teach a skill you have, mentor someone, bring a person through the door who needed to meet another person. Participation is what turns a visitor into someone with a stake, and a stake is what brings them back.

Participation is also the cleanest way to see why a music venue and a gallery are not the same problem, even though they rhyme. A venue's only real form of public participation is attending a gig, which is watching, and the only thing the casual public can actively do in the room is buy a drink. That is not an oversight in the model, but rather the skill floor. You can’t run a Saturday where families make music together on K'Rd, because music takes years before participation produces anything anyone wants to make or hear. A child cannot wander in off Queen Street and pick up a bass to any good effect. So a music venue is pushed, structurally, toward passive consumption and the bar, because active participation is gated behind years of practice and confined to the artists themselves.

Visual art has almost no skill floor at the entry point, and that single fact is what makes the commons model possible here and not there. Anyone can pick up a pencil. Anyone can follow a set programme, press a badge, pull a print, sit at a table and make something they are pleased to have made. The making rewards a first attempt in a way music does not. That is why an arts commons can programme for the whole public, including children, while a music venue is left trying to sell lemonade to people who came to watch.

The hours decide who it's for

The problem the commons form solves is programming, which is the real crisis of most galleries and artist-run spaces, ahead of funding. An empty calendar kills a space as surely as an empty bank account, and the default programming, a three-week exhibition cycle with an opening, only ever reaches the people who already go to openings. To be a commons you have to programme for people who are not yet art people, and you have to do it at the hours they are free.

This is the part I keep coming back to. Opening hours are the biggest access decision a space makes, and almost nobody treats them that way. A gallery open 9 to 3 on weekdays has already chosen its public: artists, who keep flexible hours, and people with the money not to be at work. Everyone on a salary is filtered out by the timetable before they have decided whether they care about art.

Fix the hours and you fix who the space is for. Picture a Saturday morning: a kid at the table pressing a badge, a parent beside them with a coffee and no particular agenda, and at 6.10pm on a Wednesday someone who works nearby coming in for the first time because the lights were on and the door was open. None of those people exist for a space that shuts at 3. Evenings bring the after-work patron, the person with a job, some disposable income, and no current relationship to any of this because all of it happens while they are at their desk. Weekends, programmed for children, bring families, and families pay off twice. In the near term, the parent comes because their kid is occupied and happy, and that parent is exactly the working person with resources the daytime gallery never meets. In the long term, the child who spends Saturdays making things in a space like this becomes, in 20 years, the artist or the patron or the councillor who takes for granted that a city ought to have places like it. You do not get that by being open while they are at school.

Patrons who bring more than money

Then there is who counts as a patron, and what a patron is for. The traditional model is a cheque for a plaque, and it assumes the useful thing a patron has is money. Often it is not. Take the artist who has never charged more than the cost of materials and a bit on top, sitting down for an afternoon with an accountant who does this for a living, and coming out with a price list they can actually defend and a show that covers their rent for once. That is worth more to the artist than a grant of the same nominal size, and it costs the accountant an afternoon. The same goes for the lawyer who runs a governance clinic, or the person who makes the one introduction that changes a career. Framing patronage as participation rather than donation widens the pool well past the wealthy, and it gives the wealthy something better than their name on a wall, which is the experience of having genuinely helped.

The infrastructure nobody can afford alone

Three things happen in a room like this at once, and it took me a while to stop seeing them as three. Work hangs on the walls and sells, with the artist keeping a fair share. Other work gets made in the studios, in view, so the making becomes part of what people come to see. And the room itself stays open to anyone who only wants to sit in it. Gallery, studio and commons, folded into one.

The thing that matters most here is duller than any of that, but it’s the one I am most sure of. Individual artists all need the same expensive infrastructure, and almost none of them can carry it alone. Fine-art and large-format printing, hard to get near and heavily marked up. A darkroom, now nearly impossible to find, that a generation of photographers would pay to use. Framing, which I would build first, because artists need it constantly and the retail markup is steep enough that doing it in-house at a fair price is both a real service and steady income. Put those under the same roof as the gallery and the studios and they carry the rest. They underwrite a Saturday programme that will never pay for itself, and they give artists a reason to be in the building on an ordinary Tuesday, which is the difference between a living place and an events space that is dark most of the week.

Where it lives

The thing I have not worked out is where a place like this should sit. The CBD gives you the passer-by, the after-work patron, the foot traffic that turns a room into a habit, and charges a rent that leaves no room for the services. The industrial fringe gives you the floor area and the affordability for the print bench, the framing workshop and the darkroom, and brings back the venues' problem: nobody passes an anonymous building in Penrose, and the transport barely reaches it. I do not think there is a clean answer yet, and I am still working out which of those risks Auckland can carry.

What it comes down to

The thread through both halves is not the bar, or the hours, or the rent. It is participation. The venue is stuck because participation is close to impossible in it: you cannot hand a stranger an instrument and get music, so the room is left with consumption, and its best move is to sell the crowd it has something they actually want rather than a worse version of what the last crowd drank. The gallery sits empty because participation is missing by choice: it opens when working people cannot come, and asks them only to look. The commons works because it widens participation until it reaches people the art world usually never touches, the kid at the Saturday table, the parent who came for the kid, the accountant with more to give than money. Each of them walks in as a visitor and leaves with a stake, and a stake is the only thing that reliably brings anyone back.

That is the lemonade problem. It is the belief that the crowd you have left will settle for a worse version of what the last one had, when what actually holds them is being given something to do, or at the very least something worth holding in their hands, in a room built for them and open when they can reach it.

Rosetta Stone, The Big Idea: https://www.thebigidea.co.nz/stories/how-could-a-venue-operate-without-relying-on-bar-sales-notes-from-a-community-hui

The Guardian (via AOL): https://www.aol.co.uk/articles/adapt-die-australian-live-music-200019000.html

Jeff Gage, Rolling Stone: https://www.rollingstone.com/music/music-features/how-independent-music-venues-will-survive-1234774162/

Keith Spera, The Advocate: https://www.theadvocate.com/new_orleans/entertainment_life/keith_spera/tipitinas-bought-by-members-of-new-orleans-funk-band-galactic-sources-say/article_ffe6034e-f4ed-11e8-a392-63848bf24aa3.html